Governments Around the World Grapple with Nonprofit Journalism

In Free Press’ 2011 report on international models for public media, we noted how many of the changes we are witnessing in the American media landscape are also happening internationally. Public media systems around the world are debating how best to transition from broadcast to broadband, newspapers are cutting costs and struggling to adapt to the digital age and governments are grappling with ways to bridge the digital divide. All of these debates impact the future of journalism at home and abroad.

Similarly, the debate over whether journalism counts as a charitable activity, and whether news organizations should be eligible for nonprofit status, does not end at our borders. Here in the U.S., the Internal Revenue Service is blocking many journalism organizations from establishing themselves as nonprofits while it studies whether journalism constitutes an educational or charitable activity within the U.S. tax code. Some journalists have been caught in a bureaucratic limbo for as long as two years as they've waited for the IRS to make a decision.

These debates impact the ability of new journalism organizations to transition from startup to sustainability. In an interview with Third Sector, a publication covering nonprofits in the U.K., the Bureau’s managing editor, Iain Overton, said that the organization "had a major funding application rejected because [the Bureau] didn’t have charitable status." And in Canada, a rejection from the Canadian Revenue Agency almost sank the Walrus, a magazine dedicated to “publishing the best work by the best writers from Canada and elsewhere.” The Walruswas denied nonprofit status once, and had to reapply to meet the Canada Revenue Agency’s arts and education guidelines.

The promotion of investigative journalism is not a charitable purpose in itself. If charity funding were used to support investigative journalism, it would have to be shown to be doing so in order to advance a charitable aim, such as advancing education.

The governments’ position in both the U.K. and the U.S. is tenuous and inconsistent. As in the U.S., the U.K. has previously granted approval for some nonprofit journalism organizations. Overton points to the established Journalism Foundation, which "promotes, develops and sustains free and fair journalism across the world." Here at home, the IRS has approved nonprofit applications for a range of diverse journalism organizations, including Mother Jones, NPR and ProPublica. And yet applications from new organizations that mimic those models are being held up. Guidelines are important, but around the world we need to ensure that our policies reflect and respond to the changing media landscape.

In “Can Nonprofits Save Journalism?” Marion R. Fremont‐Smith argues that IRS regulations don’t take into consideration the economics of the newspaper industry. She reminds us that “[revising] prior precedent due to changed circumstances is the essence of charity law,” and has ushered in important innovations and institutions we now consider fundamental to American society.

In the last year, government reports in both the U.K. and the U.S. have recommended that journalism be considered a charitable activity. The time has come to act on those recommendations.

Governments Around the World Grapple with Nonprofit Journalism

In Free Press’ 2011 report on international models for public media, we noted how many of the changes we are witnessing in the American media landscape are also happening internationally. Public media systems around the world are debating how best to transition from broadcast to broadband, newspapers are cutting costs and struggling to adapt to the digital age and governments are grappling with ways to bridge the digital divide. All of these debates impact the future of journalism at home and abroad.

Similarly, the debate over whether journalism counts as a charitable activity, and whether news organizations should be eligible for nonprofit status, does not end at our borders. Here in the U.S., the Internal Revenue Service is blocking many journalism organizations from establishing themselves as nonprofits while it studies whether journalism constitutes an educational or charitable activity within the U.S. tax code. Some journalists have been caught in a bureaucratic limbo for as long as two years as they've waited for the IRS to make a decision.

These debates impact the ability of new journalism organizations to transition from startup to sustainability. In an interview with Third Sector, a publication covering nonprofits in the U.K., the Bureau’s managing editor, Iain Overton, said that the organization "had a major funding application rejected because [the Bureau] didn’t have charitable status." And in Canada, a rejection from the Canadian Revenue Agency almost sank the Walrus, a magazine dedicated to “publishing the best work by the best writers from Canada and elsewhere.” The Walruswas denied nonprofit status once, and had to reapply to meet the Canada Revenue Agency’s arts and education guidelines.

The promotion of investigative journalism is not a charitable purpose in itself. If charity funding were used to support investigative journalism, it would have to be shown to be doing so in order to advance a charitable aim, such as advancing education.

The governments’ position in both the U.K. and the U.S. is tenuous and inconsistent. As in the U.S., the U.K. has previously granted approval for some nonprofit journalism organizations. Overton points to the established Journalism Foundation, which "promotes, develops and sustains free and fair journalism across the world." Here at home, the IRS has approved nonprofit applications for a range of diverse journalism organizations, including Mother Jones, NPR and ProPublica. And yet applications from new organizations that mimic those models are being held up. Guidelines are important, but around the world we need to ensure that our policies reflect and respond to the changing media landscape.

In “Can Nonprofits Save Journalism?” Marion R. Fremont‐Smith argues that IRS regulations don’t take into consideration the economics of the newspaper industry. She reminds us that “[revising] prior precedent due to changed circumstances is the essence of charity law,” and has ushered in important innovations and institutions we now consider fundamental to American society.

In the last year, government reports in both the U.K. and the U.S. have recommended that journalism be considered a charitable activity. The time has come to act on those recommendations.